US Social Security Administration spent nearly $300M on IT project 'boondoggle,' lawmakers say

The U.S. Social Security Administration has spent nearly US$300 million on a software system for processing disability claims that still isn't finished and has delivered limited useful functionality, according to an independent report on the project.

The U.S. House Oversight and Government Reform Committee this week released a copy of the study, which the SSA commissioned McKinsey to develop.

While the report was finished in June, SSA officials placed "a very close hold on the report with the goal of ensuring details about its findings remain secret until after Senate confirmation of Acting Commissioner Carolyn W. Colvin as Commissioner," three Republican members of the committee alleged in a letter, citing unnamed "whistleblowers." The letter was signed by committee Chairman Darrell Issa of California, James Lankford of Oklahoma, and Jim Jordan of Ohio.

The committee member's sources also said Colvin's chief of staff warned SSA employees "not to inquire about the report or even discuss its existence until later this year," the letter adds. "We find these allegations deeply disturbing."

"It is concerning that while you and other agency officials routinely testify that the agency needs more funding from Congress, the agency wasted nearly $300 million on an IT boondoggle," the letter adds.

The SSA didn't respond to a request for comment Thursday. But Terrie Gruber, whom Colvin appointed leader of the project last month, told the Associated Press that the SSA "asked for this, this independent look, and we weren't afraid to hear what the results are."

"We are absolutely committed to deliver this initiative and by implementing the recommendations we obtained independently, we think we have a very good prospect on doing just that," Gruber told the AP.

The SSA has spent $288 million during a six-year period on the project, which is called DCPS (Disability Case Processing System), according to the McKinsey report.

It cites a number of reasons for the project's woes, including "suboptimal system design" and little engagement with users after the initial design phase, resulting in "substantial quality and usability problems."

As of its beta release 4, the system will still have more than 380 outstanding problems, according to the study.

The project has seen years of delays, with the current projected date for a 1.0 product now sometime in 2016, according to a chart in the report.

However, without a "significant reset" of the project, even that time frame is likely underestimated, the report states.

On the other hand, DCPS "has the potential to drive tremendous value" by cutting costs and improving disability case processing, it adds. There's also "palpable" excitement for the project among the individuals involved in it, according to the report.

McKinsey suggested a number of changes and fixes to the project, including the appointment of a "single accountable executive" and the adoption agile software development methodologies. The firm also suggested the SSA determine a "next best alternative" to the current system, including commercial off-the-shelf software.

Lockheed Martin was selected as the prime contractor on DCPS in 2011. At the time, the contract was valued at $200 million. A Lockheed Martin spokesman didn't immediately respond to a request for comment Thursday.

The House Oversight Committee's letter is "sensationalized" and tinged with political overtones that obscure a broader truth about wasteful government spending on IT, said analyst Michael Krigsman, CEO of consulting firm Asuret and an expert on why software projects struggle and sometimes fail altogether.

"I agree that it needs to be investigated," Krigsman said. "But it's a witch hunt, looking for an individual witch in a city of witches. Why this one? There are a lot of bigger fish to fry."

Krigsman pointed to the Air Force's now-defunct ERP project, which rang up some $1 billion in costs before being tossed on the scrap heap. A Senate panel announced last year that it would launch a probe into that project.

"I think it's wonderful the committee is taking a close, hard look at [DCPS]," he said. "But I wonder why. If you want to make an example of something, this may not be the best choice."

In any case, "the real question is, when will overseers adopt a systematic and consistent approach to reducing IT-related waste, rather than the ad hoc examinations that seem to be the case today," Krigsman added.

Copyright 2016 IDG Communications. ABN 14 001 592 650. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of IDG Communications is prohibited.